KUALA LUMPUR: Affin Hwang Research has maintained its Buy call on Inari with a target price of RM3.80 based on its strong growth prospects as the company is highly leveraged to Avago’s strong wireless segment.
Coinciding with Avago’s own expansion in its wireless division, Affin Hwang thinks that Inari, being its largest contractor, will likely be a major beneficiary.
"With rapid expansion in Inari’s RF business, we think that there is also possibility of earnings surprise heading into 2HFY15.
"Taking this into account, we are not overly concerned about any dilutive impact from Inari’s ongoing 1:8 rights issue. Implied in our FY15 net profit is a quarterly net profit forecast of RM34mil per quarter, which appears modest against the backdrop of the upcoming capacity," it said.
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